New Delhi, January 5 2017: Hero Future Energies (HFE), the renewable energy firm of the Pawan Munjal-led Hero Group, today raised US$ 125 million in equity infusion from the International Finance Corporation (IFC) – the private sector investment arm of the World Bank – and the IFC Global Infrastructure Fund.
HFE today signed an agreement with IFC for the investment, the proceeds of which will be used to fund the construction of solar and wind power plants of HFE. E&Y was the transaction advisor to HFE.

Pawan Munjal, Chairman, Managing Director & Chief Executive Officer, Hero Moto Corp said, “We at Hero Group keep expanding our horizon beyond the flagship automotive business to nurture socially responsible entrepreneurship, even as we continue to build on the existing competitive strength of the Group. Hero Future Energies is a key pillar of this strategy. This marquee deal with the International Finance Corporation will empower us to take advantage of the potent ecosystem.”

Rahul Munjal, Chairman & Managing Director, Hero Future Energies, said, “Since our inception in 2012, HFE has been funded by the family. In this rapidly evolving sunrise industry, where targets are getting increasingly ambitious, partnering with like-minded institutions with complementary skill set is the future. I am happy to join hands with IFC, in our endeavour to achieve new goal of 2.7 GW renewable energy capacity by 2020. ”

“With this partnership with Hero Future Energies, IFC is helping accelerate the transition of the renewable energy generation business to mainstream power sector. Through the Global Infrastructure Fund, IFC is also bringing in the support of international institutional investors,” said Mengistu Alemayehu, Regional Director, IFC South Asia. “Such a development will boost confidence of other large business groups and international investors to contribute to India’s ambitious renewable energy targets and make a significant difference in ramping up renewable-energy capacity in the country.”

Huge advances have been made in the past few years to achieve India’s ambitious renewable energy targets of adding 175 GW of renewable energy, including addition of 100 GW of solar power, by the year 2022. Power generation from renewable energy sources like solar and wind has increased to 7.54 per of the total electricity generated in the country during April-September this fiscal. The total installed capacity from various renewable energy sources in the country as on October 31, 2016 is 28,279 MW from wind, 8,728 MW from solar, 4,997 MW from bio-power and 4,323 MW from small hydro power.

About Hero Future Energies

HFE carries an illustrious legacy of the Hero Group; a strategic decision of the Group to enter the domain of power generation from clean and renewable sources of energy. Established in 2012, Hero Future Energies is present across 12 states of India. The young company is an Independent Power Producer (IPP) with operating plants of ~ 360 MW and has 1.4 GW of projects in the pipeline. The company has ambitious growth plans to invest progressively in wind, grid connected solar, rooftop sectors, energy storage over the next few years. By June 2017, it will reach 1.1 GW capacity, having commissioned projects of ~ 520 megawatts in wind and ~550 megawatts in solar in this period. The company is optimistic about building a robust portfolio of 2.7 GW by 2020. HFE plans to set up additional capacity internationally and also develop a sizeable presence in roof top solar plants.

As the Indian economy continues its growth trajectory, HFE is poised to provide clean power to industries, businesses, educational institutes, non-profits and governmental organizations at competitive rates. HFE will assist its clientele in fulfilling their Renewable Purchase Obligations (RPOs) by reducing their dependence on power generated by fossil fuels like coal, oil and natural gas.

About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org

India is IFC’s top country exposure, globally. IFC’s committed portfolio in India is over $5 billion as of June 30, 2016. In FY16, IFC committed $1.1 billion in new investments in the country. In addition to strengthening local capital markets in India, IFC is focused on boosting financing in infrastructure and logistics, promoting financial inclusion, helping create conditions to attract increased private capital, and helping structure public-private partnerships.